Asian markets were mixed yesterday as lingering concerns about the Chinese economy cancelled out a positive lead from Wall Street and bargain hunting.
Tokyo stocks were flat inching up amid dip buying by investors who had few trading cues.
The Nikkei 225 Index gained 0.07 percent, or 6.77 points, to 10,018.24.
With the dollar remaining weak against the yen, “there are many investors who want to buy on dips” in the Nikkei index, said Hideyuki Ishiguro, supervisor at investment strategy at Okasan Securities.
Chinese shares also ended flat. The Shanghai Composite Index edged up 0.05 percent, or 1.06 points, to 2,350.60.
“Recent market performance is mainly a reaction to China’s slowing domestic economy and its vows to strictly implement property control measures,” Zhang Yanbin, an analyst at Zheshang Securities, said.
Sydney ended 0.18 percent, or 7.6 points, lower at 4,262.8 and Seoul fell 0.38 percent, or 7.64 points, to 2,019.19.
Traders were given few buying incentives save Friday’s positive close on Wall Street.
End-of-the-quarter “window-dressing” added to selling pressure, while “there are still plenty of factors to dent risk appetite over coming days, not least of which is the gyrations in oil prices”, Credit Agricole said in a note to clients.
HONG KONG: Shares closed flat yesterday as a positive lead from Wall Street was offset by ongoing concerns over the Chinese economy. The Hang Seng Index edged 0.06 points up to 20,668.86.
“We desperately need a positive catalyst if we are going to see any real strength from here…,” said Jackson Wong, vice-president of equity sales at Tanrich Securities.
SINGAPORE: Stocks gave up early gains yesterday after HSBC removed blue-chip Singapore Telecommunications Ltd from its top 10 Asian stocks equity portfolio, as it cut its rating for Singapore to underweight from overweight.
The Straits Times Index slipped 0.52 percent, or 15.58 points, to 2,974.50. Casino operator Genting Singapore fell two percent, leading the overall index down.
Analysts expect the market to further consolidate.
KUALA LUMPUR: Share prices on Bursa Malaysia closed lower as sentiment turned softer in line with the weaker Asian markets, weighed by disappointing economic data from the US and China, dealers said.
The benchmark FTSE Bursa MalaysiaKLCI (FBM KLCI) lost 2.85 points to 1,582.98.
The Finance Index, however, rose 34.75 points to 14,218.87, the Industrial Index declined 0.39 point to 2,864.75 and the Plantation Index fell 37.59 points to 8,662.87.
The FBM Emas Index slipped 26.171 points to 10,876.27 and the FBM70 Index was 48.23 points lower at 12,022 while the FBM ACE Index declined 18.93 points to 4,686.45.
In other markets:
* Taipei fell 1.35 percent, or 108.99 points, to 7,967.62.
* Manila closed 0.25 percent, or 12.81 points, lower at 5,029.63.
* Jakarta fell 0.24 percent, or 9.85 points, to 4,031.71.
* Bangkok closed 0.51 percent, or 6.12 points, lower at 1,188.32.
* Mumbai slid 308.96 points or 1.78 percent to 17,052.78.
EUROPE: European stocks firmed unsteadily yesterday, helped by rising German business confidence, but the Spanish market fell after an electoral setback for the government amid new strains over its debt.
The pan-European FTSEurofirst 300 index of top shares was up 0.35 percent at 1,082.90 points by 1145 GMT, having fallen to 1,076.99 earlier.
In late morning trading, London’s FTSE 100 benchmark index rose 0.38 percent to 5,876.77 points and Frankfurt’s DAX 30 added 0.36 percent to 7,020.98, while in Paris the CAC 40 was flat at 3,476.24 points.
Madrid’s Ibex 35 index dived 1.71 percent to 8,310.8 points.
AMERICA: Stocks leapt to multi-year highs and recorded one of their biggest gains of the year Monday after Federal Reserve Chairman Ben Bernanke suggested that the economy still needs help to produce faster job growth.
The Dow Jones industrial average climbed 160.90 points to 13,241.63, its third-best showing this year. The Standard & Poor’s 500 index rose 19.40 points to 1,416.51, its highest close since May 2008.
The Nasdaq composite index, which is closing in on a 20 percent rally for the year, climbed 54.65 points to 3,122.57, its best finish since November 2000.
Health care stocks led the market on a day when the Supreme Court began hearing arguments on the constitutionality of President Barack Obama’s 2010 health care law, which will require Americans to carry insurance or pay a penalty.
If the court upholds the law, the insurance companies stand to gain 30 million customers. But the full impact is hard to judge. The industry also ran ads against the overhaul after deciding it would not bring them enough healthy patients to balance higher costs.
Health care stocks gained 1.7 percent as a group Monday, beating the S&P’s 1.4 percent gain. Aetna rose 3.1 percent, WellPoint 2.9 percent and UnitedHealth Group 2.7 percent. The court is expected to decide the case in June.
Bernanke, speaking to a group of economists, sounded pessimistic about jobs even though the country has added an average of 245,000 jobs each month since December and the unemployment rate has fallen steadily since last summer.
He noted that the number of people working and the hours they work are well below where they stood before the 2008 financial crisis. He also suggested that some of the decline in the rate was because discouraged workers gave up looking for work.
Bernanke’s comments could mean two things for the market, both good for stocks.
- They could suggest that he believes the Fed needs to continue to prop up the economy – by keeping short-term interest rates near zero and perhaps by buying more bonds later.
The Fed has embarked on two previous rounds of bond-buying, most recently in August 2010. The idea is to drive down long-term interest rates and encourage investors to buy stocks. The second round ignited a 28 percent stock rally in eight months.
“He didn’t say anything new. It’s just the fact that he said it,” said Chip Cobb, senior vice president of Bryn Mawr Trust Asset Management in Pennsylvania. “Now we’re looking for more stimulus again. It’s like we can’t get enough.”
- Bernanke said that some recent hiring is merely companies making up for laying off too many people in 2009, rather than a sign of a growing economy. That could be a relief to investors who were worried that labor costs would grow too quickly and shrink earnings, said Paul Zemsky, head of asset allocation at ING Investment Management in New York.
Some of the jump in stocks could also be because money managers are piling into stocks before the first quarter ends this week. Fund managers who missed out on this quarter’s rally will want to show clients they are invested for the next quarter.
“It may not be a wise investment decision, but I think it happens,” said Brian Lazorishak, portfolio manager at Chase Investment Counsel in Charlottesville, Va.
Stocks mostly rose in Europe. Germany’s DAX index climbed 1.2 percent after a measure of business confidence in that country rose for the fifth month in a row. France’s CAC-40 rose 0.7 percent, and in London, the FTSE rose 0.8 percent.
The euro gained less than a penny against the dollar, to $1.335. Gold rose $23.20 to $1,685.60 an ounce.
The yield on the 10-year Treasury note rose to 2.25 percent from 2.23 percent late Friday. Rising yields are a sign that investors are willing to take money out of safer government bonds and put it into riskier investments like stocks.
The price of crude oil settled at $107.03, up 16 cents, and the average price of gasoline hit $3.90 per gallon. Last year’s peak was $3.98 but that was set in May, when the summer driving season begins and prices usually rise.
Benchmark Currency Rates USD EUR JPY GBP CHF CAD AUD HKD USD – 1.3361 0.0120 1.5963 1.1073 1.0085 1.0526 0.1287 EUR 0.7484 – 0.0090 1.1947 0.8289 0.7548 0.7878 0.0963 JPY 82.990 110.880 – 132.471 91.9060 83.6970 87.3680 10.6830 GBP 0.6265 0.8370 0.0075 – 0.6937 0.6318 0.6594 0.0806 CHF 0.9030 1.2065 0.0109 1.4415 – 0.9105 0.9505 0.1162 CAD 0.9915 1.3248 0.0119 1.5828 1.0981 – 1.0437 0.1276 AUD 0.9500 1.2693 0.0114 1.5165 1.0521 0.9581 – 0.1223 HKD 7.7683 10.379 0.0936 12.4007 8.6030 7.8344 8.1772 – Bloomberg